Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL concerning the subscription by the European Union to additional shares in the capital of the European Bank for Reconstruction and Development (EBRD) and amending the Agreement establishing the EBRD as regards the extension of the geographic scope of EBRD operations to sub-Saharan Africa and Iraq in a limited and incremental manner, and removing the statutory capital limitation on ordinary operations
Date: 2024-01-22
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EBRD, European Union, Iraq, capital increase, economic reconstruction, multilateral agreement, revision of an agreement, share, shareholding, sub-Saharan Africa

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 22.1.2024  COM(2024) 42 final 2024/0019 (COD)  Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL concerning the subscription by the European Union to additional shares in the capital of the European Bank for Reconstruction and Development (EBRD) and amending the Agreement establishing the EBRD as regards the extension of the geographic scope of EBRD operations to sub-Saharan Africa and Iraq in a limited and incremental manner, and removing the statutory capital limitation on ordinary operations  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  European  Bank  for  Reconstruction  and  Development  (EBRD)  was  founded  in  1991  to 
support  the  transition  towards  market-oriented  economies  in  Central  and  Eastern  European 
countries following the  collapse of  communist regimes. The European  Union, together with 
the  European  Investment  Bank  (EIB)  and  40  countries  (including  all  Member  States  of  the 
Union at that time), were founding members. Currently1 the EBRD is  owned by 72 countries, 
the  Union,  and  the  EIB.  Following  two  extensions  of  its  original  geographical  scope,  the 
EBRD  today  supports  investments  in  38  countries  of  operation2  that  are  committed  to  and 
applying  the  principles  of  multiparty  democracy,  pluralism  and  market  economics,  with  the 
aim to develop private and entrepreneurial initiative.3 

The  proposed  Decision  is  intended  to  allow  the  Union  to  subscribe  for  additional  paid-in 
shares in the EBRD in the capital increase decided by its Board of Governors on 15 December 
2023 to ensure the Bank’s support for resilience and reconstruction in Ukraine beyond 2023, 
and the continued support in all of its countries of operations in addressing the most pressing 
transition challenges, aligned with the EBRD’s mandate and strategic direction.  

The proposed Decision is also intended to approve amendments to the Agreement establishing 
the EBRD, which (i) enable the limited and incremental expansion of the geographic scope of 
the  EBRD’s  operations  to  sub-Saharan  Africa  and  Iraq  and  (ii)  remove  the  statutory  capital 
limitation  on ordinary operations and entrust  the EBRD Board of Directors to  establish and 
maintain any appropriate limits with respect to capital adequacy metrics. 

The  proposed  Decision  authorises  the  Governor  representing  the  Union  in  the  EBRD  to 
deposit the requisite instrument of subscription of new shares as well as communicate to the 
EBRD  the  declaration  of  acceptance  of  the  above-described  amendments  to  the  Agreement 
establishing the EBRD.  
The Union became a member of the EBRD subsequent to Council Decision 90/674/EEC4 of 
19 November 1990 on the conclusion of the Agreement  establishing  the EBRD5. The initial 
capital of the EBRD was fixed at ECU 10 billion, of which the Union subscribed 3%. 

In 1996, the Governors of the EBRD decided to double the authorised capital of the EBRD for 
which  the  Union  subscribed  an  additional  30  000  shares  of  EUR  10  000  each,  bringing  the  
subscribed  capital  by  the  Union  at  EUR  600  million6.  The  Union  share  in  the  EBRD  total 
authorised  capital  was  maintained.  The  subscription  of  additional  shares  followed  Council 

1 
2 

3 

4 
5 

6 

At the end of 2023 
Albania,  Armenia,  Azerbaijan,  Belarus  (Access  to  EBRD  resources  suspended  since  March  2022), 
Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Egypt, Estonia, Georgia, Greece, 
Hungary,  Jordan,  Kazakhstan,  Kosovo,  Kyrgyz  Republic,  Latvia,  Lebanon,  Lithuania,  Moldova, 
Mongolia, Montenegro, Morocco, North Macedonia, Poland, Romania, Russia (no new operations since 
2014 and access to EBRD resources suspended since March 2022), Serbia, Slovak Republic, Slovenia, 
Tajikistan, Tunisia, Turkmenistan, Türkiye, Ukraine, Uzbekistan 
Pursuant  to  Article  8.3  of  the  Agreement  Establishing  the  EBRD,  access  to  EBRD  resources  by  the 
Russian Federation and Belarus was suspended on 1 April 2022. 
OJ L 372, 31.12.1990, p. 1. 
According  to  Council  Decision  90/674/EEC  of  19  November  1990,  the  Union  is  represented  by  the 
Commission in the EBRD. 
This  amount  was  composed  of  EUR  157.5  million  paid-in  capital  and  EUR  442.5  million  callable 
capital. 

EN 

1 

  EN 

 
 
Decision 97/135/EC7 adopted on 17 February 1997 providing that "the European Community 
should  subscribe  for  extra  shares  as  a  result  of  the  Decision  to  double  the  capital  of  the 
EBRD".  In  2010,  the  EBRD  decided  to  increase  its  authorised  capital  stock  by  EUR  10 
billion, consisting of 100 000 paid-in shares and 900 000 callable shares in order to maintain 
enough capital to sustain over the medium term a reasonable level of activity in its countries 
of  operations.  The  Union  accordingly  subscribed  to  additional  shares  following  Decision 
1219/2011/EU adopted on 16 November 20118. 

During its Annual Governors’ Meeting in Samarkand on 18 May 2023, the EBRD's Board of 
Governors took three strategic decisions, which will shape the EBRD’s future: 

First,  the  Board  of  Governors  adopted  Resolution  No.  258,  which  stipulates  that  further 
shareholder  support  will  be  needed  to  enable  the  EBRD  to  fulfil  its  mission  in  Ukraine  by 
ensuring  continuous  support  beyond  2023.  The  resolution  came  in  the light  of  the  February 
2022  Russia’s  war  of  aggression  against  Ukraine,  supported  by  the  government  of  Belarus. 
The EBRD has been the largest institutional investor and committed partner to Ukraine since 
the Ukrainian independence in August 1991.  

Due to its unique mandate and comparative advantages, shareholders have been clear that the 
EBRD  must  continue  playing  a  critical  part  in  the  international  effort  -  working  in  close 
cooperation  with  the  Union  and  other  International  Financial  Institutions  (IFIs)  -  to  support 
Ukraine’s  real  economy  in  wartime  and  in  post-war  reconstruction,  whilst  maintaining  its 
financial strength. The Board of Governors has consequently established support for Ukraine 
now and in the future as the EBRD’s highest priority.  

The Board of Governors have also stated that the EBRD must continue supporting all of its 
countries of operation. Many of those continue to be negatively affected by the war, including 
those accepting refugees, and whose economies have been largely dependent on Russia. 

The  Board  of  Governors  further  concluded  that  paid-in  capital  is  the  most  efficient  form  of 
shareholder support and that it aimed to take a final decision on the amount and timing of the 
capital  increase  by  the  end  of  2023.  The  capital  increase  is  meant  to  give  the  EBRD  the 
necessary  means  to  continue  supporting  Ukraine  while  protecting  its  financial  strength  and 
AAA-rating. Specifically, this is needed to ensure a sustained level of activity in wartime and 
high levels of investment in Ukraine’s reconstruction phase. 
Accordingly,  on  15  December  2023  the  Board  of  Governors  adopted  Resolution  No.  265,9 
which authorises the EBRD to increase its number of shares by 400 000 new shares priced at 
EUR 10 000 each, totalling EUR 4 billion, with an effective date of 31 December 2024. 

The Union’s participation in the capital increase will ensure that the Union maintains its 3% 
direct share of the total subscribed capital of the EBRD. The EIB (3%) and the Member States 
individually (EU27, ca. 48.4%) are also shareholders in the EBRD, which currently give the 
Union a combined majority shareholding of 54.4%. 

The  Union  will  be  able  to  subscribe  in  a  proportional  manner  for  12  102  new  shares,  each 
share having a par value of EUR 10 000 increasing the number of paid-in shares of the Union 
to 102 146. The shares would be paid for over five years in equal instalments. 

7 
8 
9 

OJ L 57, 26.2.1997, p. 4. 
OJ L 313, 26.11.2011, p. 1. 
Resolution 265 

EN 

2 

  EN 

 
 
 
Table 1: Union shareholding in the EBRD following the capital increase 

Existing no. of 
Shares 

No. of 
new 
shares 

No. of shares 
after capital 
increase  

Amount in 
EUR of new 
paid-in capital 

Amount in EUR of each 
payment instalment 

90 044 

12 102 

102 146 

121 020 000 

24 204 000 

Second,  in  May  2023  the  Board  of  Governors  decided  in  Resolution  No.  25910  to  proceed 
with  a  limited  and  incremental  expansion  to  sub-Saharan  Africa  and  Iraq,  by  amending  the 
geographical  scope  of  EBRD  operations,  which  is  defined  in  Article  1  of  the  Agreement 
establishing  the  EBRD.  The  report  of  the  EBRD  Board  of  Directors  to  the  Board  of 
Governors  concluded  that  the  EBRD’s  mandate  and  business  model  would  fit  most 
appropriately  in  six  countries  in  sub-Saharan  Africa,  namely  Benin,  Côte  d'Ivoire,  Ghana, 
Kenya,  Nigeria,  and  Senegal,  with  the  first  investments  envisaged  to  take  place  from  2025 
onwards,  subject  to  these  countries  applying  for  the  EBRD’s  membership  and  country  of 
operation  status  and  subsequent  approval  thereof  by  the  EBRD  Board  of  Governors.  The 
decision  reflects  the  growing  economic  links  between  the  EBRD’s  current  countries  of 
operations and sub-Saharan Africa and Iraq and its potential for developing the private sector 
in those economies in line with Bank’s transition mandate. This is all the more important due 
to the destabilizing role played by Russia in the region. 

The  analysis  performed  by  the  EBRD  confirms  that  a  limited  and  incremental  expansion  to 
the above mentioned six countries in sub-Saharan Africa and Iraq will not 1) impair its ability 
to support its existing countries of operations, 2) compromise its triple-A credit rating, or 3) 
lead  to  a  request  for  additional  capital  contributions.  Moreover,  such  a  limited  and 
incremental  expansion  of  the  geographic  scope  of  its  operations  will  be  enabled  through  an 
amendment  of Article 1  of the Agreement  establishing the EBRD. The Board of Governors 
has been clear that the implementation of the expansion must be carried out in a way that will 
not dilute the focus of the EBRD in supporting its existing countries of operation, including 
Ukraine and other countries affected by Russia’s war.  

Under the terms of the resolution adopted, any applications for recipient country status will be 
considered after the ratification and entry into force of the relevant amendment to Article 1 of 
the  Agreement  establishing  the  EBRD.11  All  applications  received  will  be  assessed  in 
accordance with the EBRD’s established governance procedures. 

The EBRD does not envisage making any investments in these countries before 2025.  

Third,  in  line  with  the  G20  Capital  Adequacy  Framework  Review  recommendations,  the 
Board  of  Governors  in  May  2023  decided  in  Resolution  No.  26012  to  remove  from  Article 
12.1  of  the  Agreement  establishing  the  EBRD  the  statutory  capital  limitation  on  ordinary 
operations  and  to  delegate  to  the  Board  of  Directors  all  aspects  of  the  EBRD’s  capital 
adequacy  framework.13  This  paves  the  way  for  more  flexible  and  dynamic  capital 
management, while ensuring continuous control of the main capital metrics by shareholders. 

10 
11 

12 
13 

Resolution 259  
For the amendment of Article 1 to take effect, 3/4 of EBRD Members, including at least two recipient 
countries, representing 4/5 Total Voting Power in the EBRD will need to support it.   
Resolution 260 
For the amendment of Art. 12.1 to take effect, at least 3/5 of EBRD Members, representing at least 85% 
of Total Voting Power in the EBRD would need to support it. 

EN 

3 

  EN 

 
 
Article 12.1 of the Agreement establishing the EBRD currently places a formal limitation on 
the  nominal  value  of  the  ordinary  capital  obligations  that  the  EBRD  can  assume.  This 
provision  is  similar  to  that  found  in  the  foundational  documents  of  other  Multilateral 
Development Banks (MDBs).  

However,  over  the  past  decade,  shareholders  have  attached  increasing  importance  to  MDBs 
being innovative in the use of their capital, with the objective to use their capital capacity in 
an  optimal  way  and  to  be  in  a  position  to  maximise  their  impact.  The  latest  and  most 
comprehensive set of proposals to support this goal was put forward by the G20 Independent 
Review  of  MDB’s  Capital  Adequacy  Frameworks.  This  Review  made  wide-ranging 
recommendations,  which  the  EBRD  and  its  Board  of  Governors  have  carefully  considered. 
Notably,  the  Review  recommended  that  MDBs  should  relocate  specific  numeric  leverage 
targets – such as that set out under Article 12.1 – from MDB statutes to their capital adequacy 
frameworks.  Taking  this  action  would  increase  flexibility  by  enabling  the  EBRD  to  make 
necessary future adjustments to the targets without the need to amend its basic documents. 

• 

Consistency with existing policy provisions in the policy area 

the  Union  budget  under 

The  Union  partnership  with  the  EBRD  is  stronger  than  ever.  The  EBRD  is  involved  in 
implementation  of 
indirect  management  (grants,  financial 
instruments, and budgetary guarantees) thus supporting the achievement of policy objectives 
of  the  EU  Multiannual  Financial  Framework.  EBRD  is  also  a  key  contributor  to  Global 
Gateway  implementation.  The  Union  accounts  for  40  %  of  total  donor  funds  since  the 
EBRD’s inception, thus being the largest donor to the Bank. In 2022, the Union contributed to 
the  EBRD’s  support  for  its  countries  of  operation  by  providing  EUR  998  million  of  donor 
funding and guarantees to support joint priorities, inside and outside the Union.  

In 2022  alone, the Union and EBRD signed important  forward-looking agreements,  such  as 
the Financial Framework Partnership Agreement, the InvestEU Guarantee Agreement and two 
Guarantee Agreements under the European Fund for Sustainable Development Plus (EFSD+). 
When implementing EU funds the EBRD should continue adhere to the rules and procedures 
as laid down in the Financial Regulation.14 

The  EBRD  has  been  the  largest  institutional  investor  in  Ukraine  and  has  supported  the 
country’s transition to a sustainable market economy for the past thirty years. Following the 
Russia’s war of aggression against Ukraine, the EBRD has worked closely with the Union and 
other international partners, such as the IMF, to promote common objectives in Ukraine. The 
scale  of  the  support  needed  in  the  long  run  in  Ukraine  makes  efficient  and  effective 
coordination with the other players, including the MDBs and IFIs, essential to maximise the 
impact  of  finite  resources.  The  common  goals  are  provided  by  the  commitment  of  the 
Government  of  Ukraine  to  restoring  and  maintaining  macroeconomic  stability  and 
progressing towards membership of the Union.  

In this context the Union objectives regarding the EBRD are: (i) at least maintaining its voting 
share  at  the  current  level,  in  order  to  continue  realising  EU  policy  priorities  in  Ukraine,  as 
well other EBRD countries of operation; (ii) amending the Agreement establishing the EBRD 
to  a)  extend  the  EBRD’s  geographical  scope,  in  a  limited  and  incremental  way,  to  certain 
countries in sub-Saharan Africa and Iraq; and b) to remove the statutory capital limitation on 
ordinary operations and delegate to the Board of Directors all aspects of the EBRD’s capital 
adequacy  framework,  in  line  with  the  G20  Independent  Review  recommendations,  to  allow 

14 

OJ L 193, 30.7.2018, p. 1–222 

EN 

4 

  EN 

 
for a flexible and dynamic capital management, while ensuring continuous control of the main 
capital metrics by shareholders.  

• 

Consistency with other Union policies 

The EBRD was established with a mandate to “foster transition towards open market-oriented 
economies and to promote private and entrepreneurial initiative in the countries committed to 
applying  the  principles  of  multilateral  democracy,  pluralism  and  market  economics”  across 
Central  and  Eastern  Europe,  Central  Asia,  since  2006  in  Mongolia  and,  since  2012,  the 
southern and eastern Mediterranean region. The EBRD generally applies and promotes Union 
standards and policies in its operations. Through its projects, the EBRD uses policy dialogue 
and the application of conditionalities (e.g., transition impact, corporate governance standards, 
procurement,  environmental  standards,  etc.)  to  meet  Union  requirements  in  areas  such  as 
environmental and social policies.  

The EBRD’s response to  Russia’s war of aggression against Ukraine has been strong and in 
line  with  the  Union  policy,  as  the  Bank  quickly  announced  a  comprehensive  package 
targeting the deployment of EUR 3 billion of investment in 2022-23 in support of Ukraine.15 
The EBRD’s response has also comprised significant support for the Bank’s other countries of 
operation affected by the war through its resilience and livelihood framework. The EBRD is 
an active participant in the Steering Committee of the Donor Coordination Platform, which is 
comprised of senior officials from Ukraine, the G7 and the Union. This Platform coordinates 
financing  for  Ukraine's  immediate  needs  as  well  as  for  its  economic  recovery  and 
reconstruction  efforts.  Participating  in  the  paid-in  capital  increase  of  the  EBRD  is  the  most 
effective  and  efficient  instrument  to  provide  the  greatest  leverage  and  a  stable  basis  for  the 
EBRD’s continued investment in Ukraine. 

In  candidate  countries,  the  EBRD’s  pursuit  of  transition  objectives  dovetails  well  with  the 
goal of progressing towards accession to the Union. The Commission’s preliminary analysis 
of Ukraine’s status as a candidate country for membership of the Union shows that significant 
reform will be needed across the board to bring Ukraine in line with the Union standards. The 
efforts  of  the  EBRD  –  and  the  conditionalities  which  will  surround  that  effort  –  will  be 
consistent with successfully attaining these reforms in order to support Ukraine’s membership 
objectives. 

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

• 
The EBRD’s capital was increased twice before, in 1996 and in 2011.16 The Union subscribed 
to additional capital on both occasions according to its share in the capital.  

Following  the  entry  into  force  of  the  Treaty  on  the  Functioning  of  the  European  Union 
(TFEU), the 2011 decision to participate in the capital increase was taken by co-decision with 
Article  212  TFEU  as  legal  basis  which  provides  for  the  Union  to  carrying  out  economic, 
financial, and technical cooperation measures, in particular assistance with third countries.  

15 

16 

On 23 October 2023,  the EBRD announced that the target of deploying EUR 3bn of financing in the 
Ukrainian real economy had been reached. 
The EBRD’s capital was increased in 1996 in order to allow for the increase of the Bank’s operations in 
its original regions of operation in line with its transition mandate, whereas the capital increase in 2011 
was agreed in response to the 2008 financial crisis and the recognised need by the Bank’s shareholders 
to step up its activity to help promote and support recovery in its region. 

EN 

5 

  EN 

 
Decision 602/2012/EU on the amendment of the Agreement establishing the EBRD to allow 
for  the  expansion  of  EBRD  operations  into  the  Southern  and  Eastern  Mediterranean  region 
was also based on Article 212 TFEU.  

Considering the above precedents and that the purpose of the capital increase is to allow the 
EBRD to support the resilience and reconstruction of Ukraine, it seems appropriate to base the 
proposed Decision on Article 212 TFEU, including the ancillary amendment of Article 12.1. 

• 

Subsidiarity (for non-exclusive competence)  

The proposed Decision pertains to the Union’s direct membership of and shareholding in the 
EBRD.  

• 

Proportionality 

Not applicable 

• 

Choice of the instrument 

The purpose can only be achieved through a Decision by the Council and the Parliament. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

Between  2021-2023,  the  EBRD  undertook  an  in-depth  analysis  on  its  future  strategic 
direction. EBRD shareholders (which include, among others, all Member States, the EIB and 
the Commission  representing the Union) have been actively  involved in  the process.  In this 
framework,  the  EBRD  carried  out  an  analysis  of  capital  enhancement  options,  based  on  its 
internal  capital  needs,  the  maintenance  of  its  Triple-A  credit  rating,  as  well  as  the  effective 
and efficient use of shareholders' capital. The current decision on the EBRD capital increase, 
the  expansion  of  operations  to  sub-Saharan  Africa  and  Iraq  and  the  removal  of  the  capital 
utilisation as a statutory limit, reflects in-depth analysis, discussions and negotiations among 
the EBRD's shareholders. 

• 

Collection and use of expertise 

Capital increase! 

The EBRD Board of Governors has reviewed the evolution of the EBRD’s work in Ukraine 
regularly since the start of the war. A series of reports by the EBRD’s Board of Directors have 
assessed the role which the EBRD can play both in sustaining Ukraine’s resilience in wartime 
and stepping up to significantly support reconstruction over the long term, while ensuring its 
continuous  support  to  all  of  its  countries  of  operation.  These  reports  have  examined  the 
potential nature and scale of the EBRD’s activity, bearing in mind its particular institutional 
and operational strengths, its distinctive position in Ukraine and the work of others in support 
of  the  country.  The  reports  have  also  systematically  considered  what  shareholder  measures 
might be needed to enable Ukraine to be best supported by the EBRD. This work resulted in 
the  approval  by  the  Board  of  Governors  of  Resolution  No.  258  on  EBRD’s  Support  for 
Resilience and Reconstruction in Ukraine of 18 May 2023, which instructed the EBRD Board 
of Directors to develop a concrete proposal for a paid-in capital increase for approval before 
the end of 2023.  

Amendment of Article 1 of the Agreement establishing the EBRD 

EN 

6 

  EN 

In  May  2022,  the  Board  of  Governors  approved  Resolution  No.  248  entitled  “Toward  a 
Limited  and  Incremental  Expansion  of  the  Geographic  Scope  of  the  EBRD’s  Operations  to 
sub-Saharan Africa and Iraq”. The Resolution, which was based on an in-depth assessment of 
the  EBRD’s  potential  value  added  in  the  region  and  the  capital  and  financial  impact  on  the 
EBRD  of  a  limited  and  incremental  expansion,  approved,  in  principle,  a  limited  and 
incremental  expansion  of  the  geographic  scope  of  the  EBRD’s  operations  to  sub-Saharan 
Africa and Iraq.  

The  Board  of  Directors  subsequently  reassessed  the  capital  and  financial  implications  of  a 
limited  and  incremental  expansion  to  sub-Saharan  Africa  and  Iraq,  in  the  context  of  the 
overall  assessment  of  the  EBRD’s  financial  standing.  The  reassessment  showed  that  within 
the period of the current Strategic and Capital Framework until 2025 and thereafter until the 
end of 2030, the impact  of any expansion on the EBRD’s capital  position would be  limited 
and  would  not,  in  itself,  impair  the  EBRD’s  ability  to  support  its  existing  countries  of 
operations, jeopardise the EBRD’s triple-A credit rating or lead to a need for another capital 
increase. 

Amendment of Article 12.1 of the Agreement establishing the EBRD 

The  main  reason  for  amending  Article  12.1  of  the  Agreement  establishing  the  EBRD  to 
remove the statutory capital limit is to relocate nominal capital utilisation limits to the capital 
adequacy  framework,  managed  at  the  level  of  the  Board  of  Directors,  in  order  to  increase 
efficiency and flexibility in the use of the EBRD ’s capital. As the G20 Independent Review 
of MDB’s Capital Adequacy Frameworks recognised, in the long run there is the risk that the 
nominal statutory limit will become a binding constraint, which could prevent the EBRD from 
supporting its recipient countries even where additional risk-bearing capacity is available. The 
EBRD  analysis  has  showed  that  the  theoretical  maximum  level  of  operating  assets  which 
could be reached under the Capital Adequacy Framework was higher than under the nominal 
ratio.  Removing  the  statutory  limit  and  allowing  the  Board  of  Directors  to  consider  the 
appropriate  levels  of  nominal  capital  utilisation  as  part  of  its  capital  adequacy  framework 
policies would allow a holistic assessment of the EBRD’s capital position to guide its lending 
activities. 

• 

Impact assessment 

Against  the  background  laid  out  in  the  previous  two  sections,  in  accordance  with  the 
proportionality  principle  and  past  practice,  the  Commission  has  not  developed  a  formal 
impact assessment. 

• 

Fundamental rights 

The proposal has no consequences for the protection of fundamental rights. 

4. 

BUDGETARY IMPLICATIONS 

The Union share in the EBRD subscribed capital equals to ca 3.03%, hence the Union would 
increase its subscribed capital  by EUR 121 020 000, in  the form  of paid-in  shares  priced  at 
EUR  10 000  per  share.  EBRD  members  can  subscribe,  on  or  before  30  June  2025,  or  such 
subsequent date not later than 31 December 2025 as the Board of Directors may determine on 
or before 30 June 2025. 

The first instalment shall be paid by each member  of the EBRD by the later of (i) 30 April 
2025; or (ii) 60 days after its instrument of subscription has become effective. The remaining 

EN 

7 

  EN 

four instalments shall be paid by 30 April 2026; 30 April 2027; 30 April 2028 and 30 April 
2029, respectively.  

This initiative requires the use of the unallocated margin under Heading 6, or the use of the 
special instruments as defined in the MFF Regulation. This will be determined at the time of 
establishment  of  the  Commission’s  proposal  for  Draft  Budget  2025  and  subject  to 
negotiations between Council and European Parliament. 

The amendments to the Agreement Establishing the EBRD have no implications on the Union 
budget. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The Governor of the EBRD representing the Union reports annually to the Parliament and the 
Council on:  

• 

• 

• 

• 

• 

the promotion of the EU's objectives; 

the use of EBRD capital; 

measures 
intermediaries;  

to  ensure 

transparency  of  EBRD  operations  via 

financial 

the  EBRD's  contributions  to  risk-taking  and  effectiveness  in  leveraging 
additional financing from the private sector;  

cooperation between the EIB and the EBRD outside the Union. 

EN 

8 

  EN 

 
2024/0019 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

concerning the subscription by the European Union to additional shares in the capital of 
the European Bank for Reconstruction and Development (EBRD) and amending the 
Agreement establishing the EBRD as regards the extension of the geographic scope of 
EBRD operations to sub-Saharan Africa and Iraq in a limited and incremental manner, 
and removing the statutory capital limitation on ordinary operations 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 212 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Pursuant  to  Article  4(3)  of  the  Agreement  Establishing  the  European  Bank  for 
Reconstruction and Development (‘EBRD’), the Board of Governors of the EBRD, on 
15  December  2023,  decided  in  their  Resolution  No.  26517  to  increase  by  EUR 
4 000 000  000 the authorised capital stock of the EBRD in order to maintain enough 
capital  to  sustain,  over the medium  term,  a reasonable level  of activity in  the EBRD 
countries of operation within statutory limits.  

Prior to that capital increase, the Union holds 90 044 shares, each share having a par 
value of EUR 10 000. 

Pursuant to Resolution 265, the authorised capital stock of the EBRD is increased by 
400 000 paid-in shares, and EBRD members can subscribe, on or before 30 June 2025, 
or such subsequent date not later than 31 December 2025 as the Board of Directors of 
the EBRD may determine on or before 30 June 2025, to a number of whole shares, pro 
rata  to  their  existing  shareholding.  The  capital  increase  is  to  be  paid  in  five 
instalments, which shall be paid by each member by the later of (i) 30 April 2025; or 
(ii) 60 days  after its instrument  of subscription  has  become effective. The remaining 
four instalments shall be paid by 30 April 2026, by 30 April 2027, by 30 April 2028 
and  by  30  April  2029,  respectively.  Accordingly,  the  Union  will  be  allowed  to 
subscribe to 12 102 new shares, each having a par value of EUR 10 000 for a total of 
EUR 121 020 000  increasing the number of paid-in shares of the Union to 102 146. 

(4) 

The  capital  increase  is  necessary  to  enable  the  EBRD’s  continued  activities  and 
investments  in  Ukraine  during  war  and  in  particular  post-war  period  to  support 
Ukraine’s  reconstruction.  In  supporting  those  activities,  the  capital  increase  also 
ensures that this effort does not restrict the capacity of the EBRD to meet needs in its 

17 

Resolution 265 

EN 

9 

  EN 

 
(5) 

(6) 

(7) 

(8) 

(9) 

other countries of operations. It is consistent with the requirement in Article 13.v) of 
the Agreement establishing the EBRD that the Bank shall seek to maintain reasonable 
diversification  in  all  its  investments.  As  a  consequence,  a  paid-in  capital  increase 
sustains a financially strong EBRD able to pursue its mandate and meet shareholders’ 
objectives in all of its countries of operations. 

It  is  appropriate  for  the  Union  to  subscribe  to  those  additional  shares  in  order  to 
achieve the Union’s objectives in the field of economic external relations and preserve 
its relative voting power within the EBRD. 
Pursuant to Resolution 25918, adopted on 18 May 2023, the Board of Governors of the 
EBRD voted in favour of the necessary amendments to the Agreement establishing the 
EBRD,  enabling  the  EBRD  to  expand  in  a  limited  and  incremental  way  the 
geographical scope of its operations to sub-Saharan Africa and Iraq while maintaining 
its full commitment to Ukraine and its existing countries of operation. That Resolution 
confirmed  that  the  extension  of  the  EBRD’s  mandate  should  be  achieved  without 
requiring additional capital contributions from its shareholders.  

The  geographic  scope  of  EBRD  operations  should  be  extended  in  a  limited  and 
incremental  way  to  sub-Saharan  Africa  and  Iraq  and  be  fully  compliant  with  the 
EBRD’s  values  of  supporting  those  countries  that  are  committed  to  and  apply 
principles  of  multiparty democracy,  rule  of  law,  respect  for  human  rights,  pluralism, 
and  market  economics.  The  EBRD  has  developed  a  phased  approach  to  starting  its 
activities in the concerned  regions, which will take into consideration the regional and 
national  specificities.  First  investments  in  sub-Saharan  Africa  are  envisaged  to  take 
place  in  selected  countries  from  2025  onwards19.  Taking  into  account  the  EBRD’s 
focus on private sector development and its transition mandate, the value that the bank 
can add  in sub-Saharan Africa and Iraq is substantial and of geostrategic importance 
for the Union. 

The  representatives  of  the  Union  in  the  governing  bodies  of  the  EBRD  should 
encourage  the  EBRD  to  continue  its  close  engagement  with  the  Union  and 
collaboration with civil society, as well as to develop further its close cooperation with 
other  European  and  international  public  financing  institutions,  in  order  to  make  full 
use  of  their  comparative  advantages,  when  extending  its  operations  to  sub-Saharan 
Africa and Iraq. 

In  line  with  the  existing  practice,  before  the  EBRD  approves  a  new  country  of 
operation, it should make a detailed technical assessment of the economic and political 
conditions  existing  in  the  country  concerned,  including:  an  assessment  of  that 
country’s  commitment  to  principles  of  multi-party  democracy,  pluralism  and  market 
economics,  as  enshrined  in  Article  1  of  the  Agreement  establishing  the  EBRD,  an 
assessment  of  transition  gaps,  and  a  review  of  activities  of  other  international 
financing  institutions  in  that  country  and  of  the  priorities  in  relation  to  which  the 
EBRD  could  best  make  use  of  its  unique  knowledge  and  skills.  Such  an  assessment 
should,    be  undertaken  subject  to  any  new  country  applying  for  the  EBRD’s 
membership  and  country  of  operation  status  and  subsequent  approval  thereof  by  the 
EBRD Board of Governors. 

18 
19 

Resolution 259 
Benin, Côte d'Ivoire, Ghana, Kenya, Nigeria, and Senegal, subject to their application and approval as 
EBRD recipient countries.  

EN 

10 

  EN 

 
(10)  By  Resolution  26020,  the  Board  of  Governors  of  the  EBRD  recognised  the  essential 
role of the EBRD in addressing pressing global challenges and the recommendations 
of the G20 Independent Review of Capital Adequacy Frameworks. In order to enable 
the  optimal  use  of  the  EBRD’s  capital  capacity  to  achieve  the  maximum  potential 
impact  in  its  recipient  countries  an  amendment  to  Article  12.1  of  the  Agreement 
Establishing the EBRD removing the statutory capital limitation is necessary. 

(11)  Pursuant  to  Article  56  of  the  Agreement  establishing  the  EBRD,  the  Board  of 
Governors  of  the  EBRD  has  asked  all  Members  whether  they  accept  the  proposed 
amendments. 

(12)  The  capital  increase  and  the  amendments  to  the  Agreement  establishing  the  EBRD 

should therefore be approved on behalf of the Union, 

HAVE ADOPTED THIS DECISION:  

Article 1 

The  Union  shall  subscribe  to  12 102  additional  shares  of  EUR 10 000  each  in  the  EBRD 
pursuant  to  Resolution  265  of  the  Board  of  Governors  of  the  EBRD  on  or  before  30  June 
2025, or such subsequent date not later than 31 December 2025 as the Board of Directors of 
the EBRD may determine on or before 30 June 2025. 

The subscription shall  be paid in five instalments, the first of which shall be paid by the later 
of  (i)  30  April  2025;  or  (ii)  60  days  after  the  instrument  of  subscription  by  the  Union  has 
become effective. The remaining four instalments shall be paid by 30 April 2026, by 30 April 
2027, by 30 April 2028 and by 30 April 2029, respectively.  

The Governor of the EBRD representing the Union shall deposit the requisite instrument of 
subscription on behalf of the Union. 

Article 2 

Article 3 

The amendments  to  Article 1  of the Agreement  establishing  the EBRD to  allow the  limited 
and incremental extension of the geographic scope of its operations to sub-Saharan Africa and 
Iraq  and  to  Article  12.1  thereof  to  remove  the  statutory  capital  limitation  are  approved  on 
behalf of the Union.  

The  Governor  of  the  EBRD  representing  the  Union  shall,  on  behalf  of  the  Union, 
communicate to the EBRD the Declaration of Acceptance of the amendments. 

Article 4 

As  part  of  the  annual  report  to  the  European  Parliament  the  Governor  of  the  EBRD 
representing the Union shall also report on the EBRD’s activities and operations in the  sub-
Saharan Africa and Iraq. 

Article 5 

20 

Resolution 260 

EN 

11 

  EN 

 
 
This  Decision  shall  enter  into  force  on  the  third  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

Article 6 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

12 

  EN 

 
LEGISLATIVE FINANCIAL STATEMENT 

FRAMEWORK OF THE PROPOSAL/INITIATIVE 

Title of the proposal/initiative 

Policy area(s) concerned 

The proposal/initiative relates to: 

Objective(s) 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

1.4.1.  General objective(s) 

1.4.2. 

Specific objective(s) 

1.4.3.  Expected result(s) and impact 

1.4.4. 

Indicators of performance 

1.5. 

Grounds for the proposal/initiative 

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

1.5.2.  Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention,  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

1.5.3.  Lessons learned from similar experiences in the past 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

1.6. 

Duration and financial impact of the proposal/initiative 

1.7.  Method(s) of budget implementation planned 

2. 

MANAGEMENT MEASURES 

2.1.  Monitoring and reporting rules 

2.2.  Management and control system(s) 

2.2.1. 

2.2.2. 

Justification of the management mode(s), the funding implementation mechanism(s), 
the payment modalities and the control strategy proposed 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio of "control 
costs ÷ value of the related funds managed"), and assessment of the expected levels 
of risk of error (at payment & at closure) 

2.3.  Measures to prevent fraud and irregularities 

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE 

EN 

1 

  EN 

3.1. 

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected 

3.2. 

Estimated financial impact of the proposal on appropriations 

3.2.1. 

Summary of estimated impact on operational appropriations 

3.2.2.  Estimated output funded with operational appropriations 

3.2.3. 

Summary of estimated impact on administrative appropriations 

3.2.3.1.  Estimated requirements of human resources 

3.2.4.  Compatibility with the current multiannual financial framework 

3.2.5.  Third-party contributions 

3.3. 

Estimated impact on revenue 

EN 

2 

  EN 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative 

Decision of the European Parliament and of the Council concerning the subscription 
by the European Union to additional shares in the capital of the European  Bank for 
Reconstruction and Development (EBRD) as a result of the decision by the EBRD to 
increase  its  capital  and  the  amendments  to  the  Agreement  Establishing  the  EBRD 
extending the geographic scope of its operations to sub-Saharan Africa and Iraq in a 
limited  and  incremental  manner  and  removing  the  statutory  capital  limitation  on 
ordinary operations. 

1.2. 

Policy area(s) concerned  

Heading 6. Neighbourhood and the World  

Title 14. External Action  

1.3. 

The proposal/initiative relates to:  

 a new action  

 a new action following a pilot project/preparatory action21  

 the extension of an existing action  

 a merger or redirection of one or more actions towards another/a new action  

1.4. 

Objective(s) 

1.4.1.  General objective(s) 

Aid the EU’s external action through investment in its neighbourhood, in developing 
countries  and the rest  of the world,  including assistance for countries preparing for 
accession to the EU. 

1.4.2. 

Specific objective(s) 

Enable the EBRD, through subscribing to new paid-in shares, to continue playing a 
critical  part  in  the  international  effort  working  in  close  cooperation  with  the  Union 
and other institutions to support Ukraine’s real economy in wartime and in post-war 
reconstruction, whilst maintaining its financial strength.  

Approve that the EBRD proceeds with a limited and incremental expansion to  sub-
Saharan Africa and Iraq, by amending the geographical scope of EBRD operations.   

In  line  with  the  G20  Capital  Adequacy  Framework  review  recommendations,  pave 
the  way  for  more  flexible  and  dynamic  capital  management  by  the  EBRD,  by 
delegating  to  the  Board  of  Directors  all  aspects  of  the  EBRD’s  capital  adequacy 
framework,  while  ensuring  continuous  control  of  the  main  capital  metric  by 
shareholders.  

21 

As referred to in Article 58(2)(a) or (b) of the Financial Regulation. 

EN 

3 

  EN 

 
 
 
1.4.3.  Expected result(s) and impact 

The  capital  increase  would  substantially  strengthen  the  EBRD  both  through  the 
tangible  financial  impact  and  as  a  confirmation  of  shareholders’  confidence  in  the 
EBRD’s mission and activity across all its countries of operations. The EBRD would 
be  sufficiently  strong  both  to  undertake  additional  investment  in  Ukraine,  both 
during  wartime  and  in  its  reconstruction,  and  continue  to  fully  support  other 
countries  of  operations  in  addressing  their  transition  challenges,  as  well  as  the 
regional and global implications of the war in Ukraine. 

A  capital  increase  will  ensure  that  in  the  future  the  EBRD  will  be  able  to  support 
both Ukraine in exceptional times and allow high and sustained support for all of its 
countries  of  operations  –  including  other  countries  affected  by  Russia’s  war  –  to 
close their transition gaps. 

In  doing  so,  the  EBRD  will  continue  to  pursue  its  2021-2025  current  strategic  and 
capital Framework in all its work, including in Ukraine, in  line with its mandate to 
integrated,  well-governed, 
facilitate 
competitive  market-oriented  economy-  with  a  strong  focus  on  the  private  sector 
development  and  concentrating  its  efforts  where  its  operations  are  most  additional 
and have highest transition impact.  

inclusive,  resilient, 

to  green, 

transition 

1.4.4. 

Indicators of performance 

The  attainment  of  objectives  will  be  measured  by  the  volume  of  EBRD  financing 
operations  by  regions,  especially  in  Ukraine  and  other  countries  of  operations 
affected  by  Russia’s  war,  by  sectors  and  by  the  volume  of  EBRD  financing 
operations  co-financed  with  other  IFIs  and/or  Commission  programmes,  as  well  as 
by other indicators set out in the EBRD impact framework.  

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

On  15  December  2023,  the  Board  of  Governors  of  the  EBRD  adopted  their 
Resolution No. 265, which authorises the EBRD to increase its number of shares by 
400  000  new  shares  priced  at  EUR  10  000  each,  totalling  EUR  4  billion,  with  an 
effective date of 31 December 2024. The Union’s participation in the capital increase 
will ensure that the Union maintains its 3% direct share of the total subscribed capital 
of  the  EBRD.  The  European  Investment  Bank  (EIB)  (3.%)  and  the  Member  States 
individually (EU27, ca. 48.4%) are also shareholders in the EBRD, which currently 
give the Union a combined majority shareholding of 54.4%. 

Pursuant  to  the  above-mentioned  Resolution,  EBRD  members  can  subscribe,  on  or 
before 30 June 2025, or such subsequent date not later than 31 December 2025 as the 
Board of Directors may determine on or before 30 June 2025, to a number of whole 
shares,  pro  rata  to  their  existing  shareholding.  Accordingly,  the  Union  will  be 
allowed to subscribe to 12 102 new shares, each having a par value of EUR 10 000 
for a total of EUR 121 020 000 increasing the number of paid-in shares of the Union 
to  102  146.The  first  instalment  shall  be  paid  by  each  member  by  the  later  of  (i) 
30 April  2025;  or  (ii)  60  days  after  its  instrument  of  subscription  has  become 
effective.  The  remaining  four  instalments  shall  be  paid  by  30  April  2026;  30  April 
2027; 30 April 2028 and 30 April 2029, respectively. 

EN 

4 

  EN 

1.5.2.  Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention,  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

The proposal  concerns the Union’s direct  subscription  to  new shares in  the EBRD, 
since the EBRD has invited all its direct shareholders to  subscribe pro-rata to  their 
current  shareholding  in  accordance  with  the  EBRD  Board  of  Governors  resolution 
265. Hence, in order to maintain the current share of Union shareholding, action at 
the Union level is required. 

1.5.3.  Lessons learned from similar experiences in the past 

In 1996, the Governors of the EBRD decided to double the authorised capital of the 
EBRD for which the Union subscribed an additional 30 000 shares of EUR 10 000 
each, bringing the Union’s subscribed capital at EUR 600 million. The Union share 
in  the  EBRD  total  authorised  capital  was  maintained.  The  Union  subscription  of 
additional shares followed Council Decision 97/135/EC.  

In 2010, the Governors of the EBRD decided to increase the authorised capital stock 
by EUR 10 billion, consisting of 100 000 paid-in shares and 900 000 callable shares 
in  order  to  maintain  enough  capital  to  sustain  a  reasonable  level  of  activity  in  its 
countries  of  operations.  The  Union  accordingly  subscribed  to  additional  shares 
following Decision 1219/2011/EU. 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

The  mandate  of  the  EBRD  is  to  “foster  transition  towards  open  market-oriented 
economies and to promote private and entrepreneurial initiative in the […] countries 
committed  to  and  applying  the  principles  of  multilateral  democracy,  pluralism  and 
market economics” across Central and Eastern Europe, Central Asia and, since 2012, 
the  Southern  and  Eastern  Mediterranean  region.  The  Union  in  total,  including  the 
Union’s  direct  share    (3.03%),  EIB  (3.03%)  and  Member  States’  individual  shares 
(EU27,  ca.  48.4%),  has  a  combined  majority  shareholding  of  54.4%  of  EBRD's 
capital. Each shareholder is represented in the EBRD’s resident Board of Directors. 
The  EBRD  generally  applies  and  promotes  Union  standards  and  policies  in  its 
operations. Through its projects, the EBRD uses policy dialogue and the application 
of  conditionalities  (e.g. 
impact,  corporate  governance  standards, 
procurement,  environmental  standards,  etc.)  to  reach  Union  requirements  in  areas 
such as environmental and social policies. 

transition 

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

The European Union subscription of additional 12 102 shares pursuant to Resolution 
265  of  the  EBRD  Board  of  Governors  requires  the  necessary  appropriations  to  be 
committed  in  the  first  half  of  financial  year  2025.  For  this  purpose,  the  dedicated 
budget line under Heading 6 (Neighbourhood and the World), specifically Item 14 20 
03 04 - European Bank for Reconstruction and Development — Provision of paid-up 
shares  of  subscribed  capital,  will  need  to  cater  for  an  amount  of  commitment 

EN 

5 

  EN 

 
appropriations equivalent to the full size of the EU participation in the EBRD paid-in 
capital increase, i.e. EUR 121 020 000. 

Considering that the action cannot be fully financed through redeployment, it would 
require the use of the unallocated margin under Heading 6 and/or use of the special 
instruments as defined in the MFF Regulation. This remains to be determined at the 
time  of  establishment  of  the  Commission’s  proposal  for  Draft  Budget  2025  and 
subject to negotiations between Council and European Parliament.  

Any budgetary implications under the MFF post 2027 will depend on the availability 
of the funding, without pre-empting the proposal and the agreement of the MFF and 
programmes. 

EN 

6 

  EN 

 
1.6. 

Duration and financial impact of the proposal/initiative 

 limited duration  

–    in effect from [DD/MM]YYYY to [DD/MM]YYYY  

–    Financial  impact  in  2025  for  commitment  appropriations  and  from  2025  to 

202922 for payment appropriations. 

unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Method(s) of budget implementation planned23  

 Direct management by the Commission 

–   by its departments, including by its staff in the Union delegations;  

–    by the executive agencies  

 Shared management with the Member States  

 Indirect management by entrusting budget implementation tasks to: 

–   third countries or the bodies they have designated; 

–   international organisations and their agencies (to be specified); 

–   the EIB and the European Investment Fund; 

–   bodies referred to in Articles 70 and 71 of the Financial Regulation; 

–   public law bodies; 

–   bodies governed by private law with a public service mission to the extent that 

they are provided with adequate financial guarantees; 

–   bodies governed by the private law of a Member State that are entrusted with 
the  implementation  of  a  public-private  partnership  and  that  are  provided  with 
adequate financial guarantees; 

–   bodies or persons entrusted with the implementation of specific actions in the 
CFSP pursuant to Title V of the TEU, and identified in the relevant basic act. 

Comments  

N/A 

22 

23 

Possible  financial  implications  for  the  years  post  2027  are  without  prejudice  to  the  Multi-Annual 
Financial Framework Regulation post 2027. 
Details of budget implementation methods and references to the Financial Regulation may be found on 
the BUDGpedia site. 

EN 

7 

  EN 

 
2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

EBRD operations will be managed in accordance with the EBRD's own monitoring 
and reporting procedures. The EBRD reports on its operations, the attainment of its 
policy  objectives  as  well  as  on  its  audited  accounts  for  each  financial  year  to  its 
Board of Governors. The Board of Governors approves, after reviewing the auditor's 
report, the general balance sheet and the statement of profit and loss of the EBRD.  

The Governor of the EBRD representing the Union reports annually to the European 
Parliament on:  

• the promotion of the Union's objectives;  

• the use of EBRD capital;  

• measures to ensure transparency of EBRD operations via financial intermediaries;  

• the EBRD's contributions to risk-taking and effectiveness in leveraging  additional 
financing from the private sector;  

• cooperation between the EIB and the EBRD outside the Union. 

2.2.  Management and control system(s)  

2.2.1. 

Justification of the management mode(s), the funding implementation mechanism(s), 
the payment modalities and the control strategy proposed 

The  action  will  be  implemented  in  direct  management  by  the  Commission,  which 
will subscribe, on behalf of the Union, to 12 102 new shares, each having a par value 
of EUR 10 000 for a total of EUR 121 020 000. The first instalment shall be paid by 
the later of (i) 30 April 2025; or (ii) 60 days after its instrument of subscription has 
become effective. The remaining four instalments shall be paid by 30 April 2026; 30 
April 2027; 30 April 2028 and 30 April 2029, respectively. 

EBRD  operations  will  be  managed  in  accordance  with  the  EBRD's  own  rules  and 
procedures,  including  appropriate  audit,  control  and  monitoring  measures.  As 
foreseen  in  the  Agreement  Establishing  the  EBRD,  the  Audit  Committee  of  the 
EBRD, which is supported by external auditors, assists the Board of Directors of the 
EBRD  and  is  responsible  for  verifying  the  regularity  of  the  EBRD  operations  and 
accounts. The Board of Directors, where the Union, represented by the Commission, 
has a Director, submits the audited accounts for each financial year for approval of 
the  Board  of  Governors  at  each  annual  meeting  and  approves  the  budget  of  the 
EBRD.  The  Board  of  Governors  approves,  after  reviewing  the  auditor's  report,  the 
general balance sheet and the statement of profit and loss of the EBRD.  

An  independent  Evaluation  Department  evaluates  the  performance  of  the  EBRD’s 
completed projects and programmes relative to objectives. It systematically analyses 
the  results  of  both  individual  projects  and  wider  themes  defined  in  the  EBRD’s 
policies. The core objective of evaluation is to contribute to the EBRD’s legitimacy, 
relevance and to superior institutional performance. 

The EBRD’s Internal Audit Department, is set up in accordance with the Institute of 
Internal Auditors’ International Professional Practices Framework and is responsible 
for providing independent and objective assurance to executive management and the 

EN 

8 

  EN 

Board  of  Directors  on  the  adequacy  and  effectiveness  of  internal  controls, 
governance, and risk management processes to mitigate the Bank’s key risks. 

The EBRD also has an Independent Project Accountability Mechanism, which is the 
grievance  mechanism  of  the  Bank.  It  deals  with  complaints  about  environmental, 
social  and  disclosure  matters  related  to  the  Bank’s  investments.  The  Mechanism  is 
independent  from EBRD  management  and undertakes  fact-finding investigations to 
determine  if  the  Bank  has  complied  with  the  environmental,  social  and  disclosure 
standards. 

Furthermore,  the  Board  of  Directors  establishes  policies  and  takes  decisions 
concerning loans, guarantees, investment in equity capital, borrowing by the EBRD, 
the  furnishing  of  technical  assistance  and  other  operations  of  the  EBRD  in 
conformity with the general directions of the Board of Governors. 

The  Board  of  Directors  has  established  three  Board  Committees  to  assist  it  in  its 
work: the Audit Committee mentioned above, the Budget and Administrative Affairs 
Committee  and  the  Financial  and  Operations  Policies  Committee.  The  Director  (or 
his  alternate)  representing  the  Union  attends  all  these  Boards  Committees.  Finally, 
the EBRD Board of Governors has established an Ethics Committee, which interpret 
and safeguard the codes of Conduct applicable for EBRD staff and board officials. 

2.2.2. 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

Article  5.3  of  the  Agreement  Establishing  the  EBRD  stipulates  that  the  Board  of 
Governors shall review the capital stock of the EBRD at intervals of not more than 
five years. The EBRD are subject to its own control systems. 

In addition, as regards the EBRD implementing EU programmes, its internal control 
systems have been found equivalent to the Commission ones in the pillar assessment 
conducted in line with the Financial Regulation. 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio of "control 
costs ÷ value of the related funds managed"), and assessment of the expected levels 
of risk of error (at payment & at closure)  

See reply above in 2.2.2. 

2.3.  Measures to prevent fraud and irregularities  

The  EBRD  has  an  independent  Office  of  the  Chief  Compliance  Officer  (OCCO), 
which is  headed by a Chief Compliance  Officer reporting directly to  the President, 
and annually, or as necessary, to the Audit Committee. The OCCO’s mandate is to 
promote good governance and to ensure the highest standards of integrity are applied 
throughout  all  of  the  activities  of  the  EBRD  in  accordance  with  international  best 
practice.  The  responsibilities  of  the  OCCO  include  dealing  with  issues  of  integrity 
interest,  corporate  governance, 
due  diligence,  confidentiality,  conflicts  of 
accountability,  ethics,  anti-money  laundering,  counter-terrorist  financing,  and  the 
prevention  of  fraudulent  and  corrupt  practices.  The  OCCO  is  responsible  for 
investigating  allegations  of  fraud,  corruption,  and  misconduct.  It  also  trains  and 
advises,  as  necessary,  EBRD  staff  members  who  are  appointed  as  directors  to  the 
boards  of  companies  in  which  the  EBRD  holds  an  equity  interest.  Financial  and 

EN 

9 

  EN 

 
 
integrity  due  diligence  are  integrated  into  the  EBRD's  normal  approval  of  new 
business  and  the  monitoring  of  its  existing  transactions.  The  EBRD  publishes  the 
OCCO’s anti-corruption report on its web site. Moreover, the OCCO has the specific 
responsibility  for  administering  the  EBRD’s  independent  project  accountability 
mechanism,  which  reviews  environmental,  social,  and  transparency-related  issues 
raised  by  project-affected  people  and  civil  society  organisations.  It  issues,  where 
warranted, a determination as to whether in approving a particular project, the EBRD 
policies.
with 
acted 

compliance 

relevant 

its 

in 

EN 

10 

  EN 

3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

•  Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure 

Contribution  

Heading of 
multiannual 
financial 
framework 

Number  

14 20 03 04  

6 

European  Bank  for  Reconstruction 
and  Development  —  Provision  of 
paid-up shares of subscribed capital  

•  New budget lines requested  

Diff./Non-
diff.24 

from 
EFTA 
countries
25 

from 
candidate 
countries 
and 
potential 
candidates
26 

fromother 
third 
countries 

other assigned 
revenue 

Diff 

NO 

NO 

NO 

NO 

In order of multiannual financial framework headings and budget lines. 

Heading of 
multiannual 
financial 
framework 

Number  

n/a 

Budget line 

Type of 
expenditure 

Diff./Non-
diff. 

from 
EFTA 
countries 

n/a 

Contribution  

from 
candidate 
countries 
and 
potential 
candidates 

from  
other 
third 
countries 

other assigned 
revenue  

24 
25 
26 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

EN 

11 

  EN 

 
 
 
 
 
 
 
 
 
3.2. 

Estimated financial impact of the proposal on appropriations  

3.2.1. 

Summary of estimated impact on operational appropriations  

–    The proposal/initiative does not require the use of operational appropriations  

–    The proposal/initiative requires the use of operational appropriations, as explained below: 

Heading of multiannual financial  
framework  

Number  6 

EUR million (to three decimal places) 

DG: ECFIN 

Year 
202527 

Year 
2026 

Year 
2027 

Year 
2028 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

 Operational appropriations  

2025 

2026 

2027 

202828 

202928 

14 20 03 04 29 

Budget line 

Commitments 

Payments 

Commitments 

Payments 

(1a) 

(2a) 

(1b) 

(2b) 

121.020 
24.204 

24.204 

24.204 

24.204 

24.204 

Appropriations  of  an  administrative  nature  financed  from  the 
envelope of specific programmes30  

Budget line 

(3) 

TOTAL appropriations 

Commitments 

=1a+1b 
+3 

121.020 

121.020 
121.020 

121.020 

27 

28 

29 
30 

Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same for the 
following years. 
Possible budgetary implications for the years post 2027 are indicative and presented for information purposes only without pre-empting the agreement on the Multi-Annual Financial 
Framework Regulation post 2027. 
According to the official budget nomenclature. 
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

12 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
for DG ECFIN 

Payments 

=2a+2b 

+3 

24.204 

24.204 

24.204 

24.204 

24.204 

121.020 

 TOTAL operational appropriations  

Commitments 

Payments 

  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

(4) 

(5) 

(6) 

121.020 

24.204 

24.204 

24.204 

24.204 

24.204 

TOTAL appropriations  
under HEADING 6 
of the multiannual financial framework 

Commitments 

=4+ 6 

121.020 

Payments 

=5+ 6 

24.204 

24.204 

24.204 

24.204 

24.204 

If more than one operational heading is affected by the proposal / initiative, repeat the section above: 

  TOTAL  operational  appropriations  (all 
operational headings) 

Commitments 

Payments 

 TOTAL appropriations of an administrative nature financed 
from  the  envelope  for  specific  programmes  (all  operational 
headings) 

(4) 

(5) 

(6) 

121.020 

24.204 

24.204 

24.204 

24.204 

24.204 

TOTAL appropriations  
under HEADINGS 1 to 6 
of the multiannual financial framework 
(Reference amount) 

Commitments 

=4+ 6 

121.020 

Payments 

=5+ 6 

24.204 

24.204 

24.204 

24.204 

24.204 

121.020 

121.020 

121.020 

121.020 

121.020 

121.020 

121.020 

121.020 

EN 

13 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Heading of multiannual financial  
framework  

7 

‘Administrative expenditure’ 

This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative 
Financial Statement (Annex 5 to the Commission decision on the internal rules for the implementation of the Commission section of the general 
budget of the European Union), which is uploaded to DECIDE for interservice consultation purposes. 

Year 
2025 

Year 
2026 

Year 
2027 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6)  

TOTAL 

EUR million (to three decimal places) 

DG: <ECFIN>z 

 Human resources  
 Other administrative expenditure  

TOTAL DG <ECFIN> 

Appropriations  

TOTAL appropriations 
under HEADING 7 
of the multiannual financial framework  

(Total  commitments  = 
Total payments) 

TOTAL appropriations  

Commitments 

Year 
202531 

Year 
2026 

Year 
2027 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

EUR million (to three decimal places) 

31 

Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same for the 
following years. 

EN 

14 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
under HEADINGS 1 to 7 
of the multiannual financial framework  

Payments 

3.2.2.  Estimated output funded with operational appropriations  

2025 

2026 

2027 

2028 

       2029                 2030                2031 

TOTAL 

Commitment appropriations in EUR million (to three decimal places) 

Indicate objectives 
and outputs  

OUTPUTS 

 

Ty
pe
32 

Avera
l
a
u
ge 
n
n
cost  A

t
n
e
m
t
s
e
v
n
i

Cost 

l
a
u
n
n
A

t
n
e
m
t
s
e
v
n
i

Cost 

l
a
u
n
n
A

t
n
e
m
t
s
e
v
n
i

Cost 

t
n
e
m
t
s
e
v
n
i

l
a
u
n
n
A

Cost 

l
a
u
n
n
A

t
n
e
m
t
s
e
v
n
i

Cost 

l
a
u
n
n
A

t
n
e
m
t
s
e
v
n
i

Cost 

l
a
u
n
n
A

t
n
e
m
t
s
e
v
n
i

Cost 

Total 
Invest
ment 

Total 
cost 

SPECIFIC OBJECTIVE No 133 … 

Annual EBRD 
Invesment in 
Ukrainet [EUR m] 

t 

- Output 

- Output 

2,500 

121.200 

2,500 

3,000 

3,000 

3,000 

3,000 

0 

3,000 

0 

20,000 

121.020 

Subtotal for specific objective No 1 

2,500 

121.020 

2,500 

TOTALS 

2,500 

121.020 

2,500 

3,000 

3,000 

3,000 

3,000 

3,000 

3,000 

3,000 

3,000 

0 

0 

3,000 

3,000 

0 

0 

20,000 

121.020 

32 
33 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 
As described in point 1.4.2. ‘Specific objective(s)…’  

EN 

15 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3. 

Summary of estimated impact on administrative appropriations  

–    The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

–    The proposal/initiative requires the use of appropriations of an administrative 

nature, as explained below: 

EUR million (to three decimal places) 

2025  

2026 

2027 

2028 

Enter as many years as necessary to show the 
duration of the impact (see point 1.6) 

TOTAL 

HEADING 7 
of the multiannual 
financial framework 

Human resources  

Other administrative 
expenditure  

Subtotal HEADING 7 
of the multiannual 
financial framework  

Outside HEADING 734 
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 7 
of the multiannual 
financial framework  

TOTAL 

The  appropriations  required  for  human  resources  and  other  expenditure  of  an  administrative  nature 
will  be  met  by  appropriations  from  the  DG  that  are  already  assigned  to  management  of  the  action 
and/or have been redeployed within the DG 

34 

Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU programmes 
and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

16 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3.1.  Estimated requirements of human resources  

–    The proposal/initiative does not require the use of human resources.  

–    The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

Estimate to be expressed in full time equivalent units 

2025 

2026 

2027 

2028 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

 Establishment plan posts (officials and temporary staff) 

20 01 02 01 (Headquarters and Commission’s Representation 
Offices) 

20 01 02 03 (Delegations) 

01 01 01 01  (Indirect research) 

 01 01 01 11 (Direct research) 

Other budget lines (specify) 

 External staff (in Full Time Equivalent unit: FTE)35 

20 02 01 (AC, END, INT from the ‘global envelope’) 

20 02 03 (AC, AL, END, INT and JPD in the delegations) 

XX 01  xx yy zz  36 

- at Headquarters 

- in Delegations  

01 01 01 02 (AC, END, INT - Indirect research) 

 01 01 01 12 (AC, END, INT - Direct research) 

Other budget lines (specify) 

TOTAL 

06 is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to management of the 
action and/or have been redeployed within the DG. 

Description of tasks to be carried out: 

Officials and temporary staff 

. 

External staff 

35 

36 

AC=  Contract  Staff;  AL  =  Local  Staff;  END=  Seconded  National  Expert;  INT  =  agency  staff; 
JPD= Junior Professionals in Delegations.  
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines). 

EN 

17 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.4.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

–    can be fully financed through redeployment within the relevant heading of the 

Multiannual Financial Framework (MFF). 

–    requires use of the unallocated margin under the relevant heading of the MFF 

and/or use of the special instruments as defined in the MFF Regulation. 

–  To  be  determined  at  the  time  of  establishment  of  the  Commission’s  proposal  for  Draft  Budget 

2025 and subject to negotiations between Council and European Parliament. 

–    requires a revision of the MFF. 

3.2.5.  Third-party contributions  

The proposal/initiative: 

–    does not provide for co-financing by third parties 

–    provides for the co-financing by third parties estimated below: 

3.3. 

Estimated impact on revenue  

–    The proposal/initiative has no financial impact on revenue. 

–    The proposal/initiative has the following financial impact: 

 

 

on own resources  

on other revenue 

please indicate, if the revenue is assigned to expenditure lines  

EN 

18 

  EN